Buy Rating Backed by Long-Term Growth Optionality and Bakken East Upside for MDU

In a report released today, Ross Fowler from Bank of America Securities reiterated a Buy rating on Mdu Resources Group, with a price target of $23.00.

Ross Fowler has given his Buy rating due to a combination of factors tied to both near-term earnings visibility and long-term growth opportunities. He projects a modest year-over-year increase in Q4 2025 operating EPS and expects full-year 2025 results to benefit from strength in the pipeline and electric segments, even as the gas segment contends with regulatory lag. Fowler also anticipates that upcoming management guidance and updates on large-load demand and rate cases will help clarify the company’s forward earnings trajectory and support investor confidence.
Another key driver of the Buy rating is the strategic potential of the Bakken East pipeline project, which has entered a binding open season that Fowler interprets as a meaningful step toward commercial validation. He incorporates this project as long-dated optionality in his valuation, alongside applying modest valuation premiums to MDU’s electric and pipeline businesses due to strong load growth prospects and favorable regulatory exposure at FERC. By rolling his valuation framework to 2028 and raising the price objective to $23, Fowler sees approximately 13% total return potential, with additional upside if Bakken East is executed successfully and if incremental pipeline and large-load opportunities materialize favorably for the company.